MENA PE fund targets €100m

The Capital Trust Group has launched a new vehicle dedicated to the Middle East and North Africa region with backing from the European Investment Bank.

London-headquartered investment firm Capital Trust Group is seeking to raise a new €100 million ($129 million) private equity vehicle targeting investments in the Middle East and North Africa (MENA) region.

The EuroMena Fund is the second fund dedicated to the region by the Capital Trust Group after the $50 million Menavest Fund, which is almost fully invested at this stage. According to the firm, Menavest has achieved a 21.6 percent gross IRR on exited deals to date.

The new fund will opportunistically target investments in countries including Lebanon, Syria, Egypt, Morocco and the GCC area – the Gulf Cooperation Council comprises the countries of Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates.

We aim to build regional leading groups of a sufficient scale that will attract international strategic buyers

Romen Mathieu, managing director Capital Trust Group

According to fund managing director Romen Mathieu EuroMena will seek to invest in a limited number of sectors: pharmaceutical/chemicals; food processinhg; logistics; banking/insurance and retail.

Speaking to PEO, Mathieu said: “EuroMena is unique as a regional fund, which helps to mitigate the political or currency risks that might face a country-focused fund.”

The fund has received a commitment of up to €10 million from the European Investment Bank (EIB) and will target other European and US economic development institutions as well as GCC institutional investors

Commenting on the firm’s strategy, Mathieu explained: “Exits are key and at the moment, we can’t count on IPO markets in the region. We aim to build regional leading groups of a sufficient scale that will attract international strategic buyers.”

The Beirut-headquartered Capital Trust Group team managing the fund will be comprised of eight to ten individuals who were involved in the management of Menavest. The firm and its affiliates will commit ten percent of the total fund size.

Investor appetite in the region is increasing as demonstrated by the recent call for proposals issued by the Overseas Private Investment Corporation (OPIC), which is intending to provide up to $100 million for selected investment funds in the MENA region. An announcement of shortlisted firms is expected in the next few days.